Behind the mysterious Dr Chau

He's been an intimate of our political and corporate leadership for years. Now the public gets a look at Australia's biggest overseas-based political donor. John Garnaut, Deborah Snow and Nic Christensen report.

July 4, 2009 — 12.00am

Businessmen of Chaozhou, a former fishing town tucked into a corner of southern China's Guangdong province, are famous for their tight friendship networks, their generosity and their di diao

Isolated from the rest of China by geography and a distinct language, they have set out to build formidable trade and investment networks throughout and beyond South-East Asia. Some Chaozhou men - such as the world's richest ethnic Chinese person, Hong Kong's Li Ka-shing (worth $US16 billion [$20 billion]), and the richest mainlander, Huang Guangyu ($US6 billion until he stumbled last year) - have grown too big to avoid the public glare.

A well-connected man . . . Dr Chau Chak Wing with the former prime minister, John Howard. Dr Chau is welcomed by both sides of politics.

Chau Chak Wing - or Zhou Zerong, as he is known in the dialect of north China - is worth a mere billion Australian dollars, according to Forbes magazine. He has preserved his di diao to the point that the Australian public was unaware he was an Australian citizen and the country's largest overseas-based political donor, lavishing more than $2 million on our major political parties.

Chau's wife and two of his three children live in Sydney. But he is based in Guangzhou, the bustling capital of Guangdong, where he has become a key go-to man for Australian politicians, officials and business people pushing into southern China.

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Australian heads of state, premiers, ambassadors and corporate chieftains have publicly - and privately - thanked him for his generosity in opening the gates to Guangdong province, an economic powerhouse of China.

"Thanks again for looking after me for a full day when I was in Guangzhou last November and introducing me to the Governor of Guangdong and generally giving advice as to how to promote our cause", wrote Charles Goode, the then chairman of Woodside Petroleum, in an August 2002 letter. Goode's effusiveness was justified: his consortium had just signed a contract to ship $25 billion of liquefied natural gas from Western Australia to Guangdong.

Chau's Australian Chinese language newspaper and his Kingold company website testify to his willingness to help. They dutifully reported that in the space of two days during a September 2007 Sydney visit, Chau met the then foreign minister, Alexander Downer, defence minister, Brendan Nelson, and deputy PM, Mark Vaile. The website noted that that these "three senior officials of Australia are all appreciative of Dr Chau's contribution …"

Doors open just as readily for Chau on the other side of Australian politics. In March last year the Kingold website reported how he travelled to Canberra to congratulate Kevin Rudd and Julia Gillard on their election victory, while also meeting the Treasurer Wayne Swan, foreign minister Stephen Smith, agriculture minister Tony Burke and Labor's then national secretary, Tim Gartrell. Rudd, Swan, Burke and Smith have all been beneficiaries of Chau's hospitality.

Until approached by the Herald, Chau had never invited a journalist to peer inside his empire. This time, he did so with trademark style.

Declining Chau's offer of air fares and accommodation, the Herald found itself ushered on arrival through a VIP tunnel under Guangzhou airport, and into a black Bentley. We headed north on an empty new freeway to Chonghua, the pristine heart of the city's drinking water catchment, where leaders including Mao Zedong and Zhou Enlai occasionally took holidays. It's where Chau has launched his latest and most ambitious property venture.

Diggers are contouring - to the specifications of the world's top designers - the land for a 27-hole golf course, a six-star hotel and VIP villas so exclusive that no resident will be seen from any other villa or public space - a luxury almost unheard of in crowded China.

The fairways will be organically fertilised and all vehicles will be electric-powered and travel underground. Golf buggies will be guided remotely by a GPS system, popping out of tunnels to assist weary golfers at the press of a button.

As with many Chinese property developments, this one began at the banquet table. Chau had spotted an official down on his luck - one who had the all-important fund-raising task of selling land but had not found a buyer.

"He had to demonstrate outstanding achievements to his superior," Chau says. "So I said, I will have this land, as much as you can give me, from the top of the mountain as far as I can see."

That land has appreciated four- or five-fold in three years, Chau says. Equally importantly, "the mayor was delighted". Chau sees the resort as a gift to the "successful and articulate" to recharge and "stimulate their thoughts". As for the displaced, Chau says, "I can't take responsibility for relocating and settling the peasants - the Government had to handle that".

Chau bought into Guangzhou's New Express Daily eight years ago in a joint venture with the provincial government's Yangcheng Evening News. Private citizens, let alone Australian passport holders, aren't meant to be involved in running Chinese newspapers - the domain of the Communist Party's propaganda departments. Few people are aware of Chau's involvement.

A senior journalist at a related newspaper says Chau provided the money while Yangcheng retained political responsibility and provided the staff. The editor, Zhang Hongchao, told us ownership and control were "too complicated" to explain.

Chau, however, insists: "I took over and invested in it. Now the management and operation are under my direction."

Guangzhou newspapers are a battleground between compelling journalism, which attracts readers and advertisers, and "propaganda discipline", which is necessary to avoid being shut down. Chau is not one for taking political risks.

"The Government has found this newspaper very commendable, because we never have had any negative reporting," Chau says. "It doesn't deal much about politics."

If Chau's golf resort and newspaper are about cultivating connections, property development is the cash cow. Nearly 200,000 Guangzhou residents live in his apartments. The heart of Chau's empire is Favourview Palace - a downtown Guangzhou sprawling mini-city of apartments, villas, clubs and schools.

At its centre is an artificial hill topped with vast lawns, groves of exotic fruit, a tennis court, a vegetable patch and a great mansion with a large minaret made from Australian sandstone. Chau's staff refer to it as the Castle. Chau invites us inside its huge double doors.

He speaks little English and carries himself with a quietly powerful energy. He is not interested in talking about his background or how he earned his di yi tong jin - the first bucket of gold. He glides quickly over the 1980s and early 1990s, when he moved from Chaozhou to Hong Kong and then Australia - or was it the other way around? - and finally Guangzhou.

His Australian citizenship was no problem: "After I made my investments, the Immigration Department was happy to send me a form to apply".

His honorary doctorate is from Keuka College, New York, for community services. He donated 3 million yuan ($550,000) two months ago to a Public Security Bureau training centre for Chinese police. "We want society to be well managed," he says. But he insists a Hong Kong newspaper report about him having major real estate deals with the bureau was wrong.

After a time, he relaxes, and talks about the life principles underpinning his success.

"I am a small businessman and I honour my reputation. I focus on friendship and integrity. People who make friends with me feel secure with my friendship. If I have a friend, I will never impose or create problems. I never ask them for any request. I don't mix friendship with business."

And then, making a point later repeated: "In the future we have a lot of opportunity to discuss together, now I have made friends with you."

Chau does not deny he is a friend to nearly everyone of high power in Guangdong; a consequence, he says, of chairing several business groups. An acquaintance says Chau's star began to rise when Xie Fei, a Chaozhou neighbour, rose to the Guangdong Communist Party secretaryship in 1991. Xie stayed there for eight years.

Another source says Chau's fortunes rose again when Lin Shusen from Shantou, next to Chaozhou, was appointed the deputy party secretary of Guangzhou municipality in 1997 and party secretary in 2002.

They note that Chau has had uncharacteristic difficulties acquiring a huge land parcel since his friend Lin was transferred to run the neighbouring Guizhou province in 2006.

But Chau is confident he can navigate Guangdong's rapidly shifting power. "It's not just one [provincial] governor that I know, but several," he says.

Business and politics in China are locked together in an astonishingly complex web of loyalty, friendship, favours and obligation. Chau is evidently a master of that system - a system that does not always translate smoothly across political and cultural borders.

Chau has expected our questions on his donations to Australian politics, and is ready. After all, a Greens MP, Lee Rhiannon, hit a raw nerve this year when she complained about foreign donations and "wealthy Chinese bankrolling a string of politicians and exerting their influence".

"I am very happy as a citizen to play my role of participant in the democratic process," Chau says.

He says he's hands-off regarding donations, which are left to his managers' recommendations, and that he asks nothing in return.

Alexander Downer, whose re-election committee got $30,000 from Chau in 2007, says: "He never asked for anything. I just got the feeling he was interested in knowing me because of the position I held. Perhaps that's being too modest; perhaps he just found me incredibly interesting and rather amusing."

A Labor insider suggests it might also be about "what gets translated back home. When Chau meets with someone like Tim Gartrell, it's that they're seen to have met with the national secretary, because the national secretary in China is the top dog".

Chau's access in Australia extends beyond Canberra. He was well-known to the former NSW Labor premiers Bob Carr and Morris Iemma, embodying for them the sister-state relationship which NSW cultivated for 30 years with Guangdong.

In 2004 Carr's office hired Chau's daughter Winky as an adviser, while later that year the Premier launched Chau's Sydney Chinese language newspaper, the Australian New Express Daily .

Winky later worked for Iemma and the two friends have since established a business consultancy together, though Iemma says Winky's father has no hand in the enterprise.

Iemma says the sister-state relationship was important enough for it to be the subject of one of the top 12 briefing folders he was given on taking over the premiership.

Chau's Australian assets are surprisingly small: two commercial properties and the newspaper. A joint venture with the University of Western Sydney providing degree content for students at his Kingold Private University in Guangzhou has run its course.

He says attempts to persuade the NSW Government to allow him to build a Dubai-style luxury six- or seven-star hotel in Sydney have gone nowhere. Although Australia is less work-efficient than China, he says, he wants to "gradually" increase investment here.

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Why did this self-made man grant an interview now, having knocked back nearly every request for years? With the Herald probing his political donations, perhaps he thought it time to introduce himself to a broader Australian audience.

Then again, it may have been Chinese zodiac compatibility. "I did my due diligence and discovered that you are a tiger, and I am a horse," he told his interviewer.